Dynamic Demand Inventory Control System

1. Dynamic Demand Inventory Control System By Supamas Viriyanusorn Jitrayut Junnapart

2. Background Inventory level of raw material is very important to operational of a manufacturing firm, it must be kept and monitored very well. Inventory control system can make this job easier.

3. Concept of Inventory Control There are three main kinds of inventory models: 1.Economic Order Quantity (EOQ) model 2.Economic Production Lot-Size model 3.Inventory model with Planned Shortage

4. Concept of Inventory Control Economic Order Quantity (EOQ) that the shortage of raw material is not allowed will be applied in this project Economic Order Quantity model

5. Economic Ordering Quantity It is very important that the order is placed at the right time and for the right quantity. Too large ordering quantity and the part is used up too slow increase carrying cost while too few ordering quantity will create high ordering cost (telephone, fax, etc.) because that must be done very often.

6. Economic Ordering Quantity Both reorder point and quantity can be calculate as: Qor = (dmd) x (Lt) and Qopt = (2CoD/Cc)1/2 Where Qor : Reorder point Qopt : Optimum Ordering Quantity dmd : Demand per day Lt : Lead time (day) Co : Ordering Cost per time Cc : Carrying Cost per unit per day

7. Economic Ordering Quantity Reorder point and quantity

8. Economic Ordering Quantity The most important point is to track changing demand of each item in the system by monitoring time and quantity that each item is withdrawn. This withdrawal time and quantity can be used to calculate the current demand.

9. Computer Program Development 1. File system: There are 2 main file types in this project Inventory data files Part index file

10. Computer Program Development - Inventory data file: Each inventory has its own data file. There are 8 attributes that represent detail for each item • Part name • Quantity • Demand or usage rate • Lead time • Order Cost per time • Carrying Cost • Time having the Quantity • Status of the item

11. Computer Program Development - Part index file: A single file that contains current active part numbers in the system. The content of part index file is the name list of active inventory number.

12. Computer Program Development There are 9 functions of program: 1. List up part This is the function that let the user know what part are in the system. 2. Add new part into system This function is for adding new inventory item to the system.

13. Computer Program Development 9 functions of program (continued): 3. Calculate This function is for calculate data in the program. 4. Withdrawal part This function is for user to withdraw inventory item from the system.

14. Computer Program Development 9 functions of program (continued): 5. Update for part ordered This function is for update data when reordering has been made for items. 6. Fill up inventory This function is for user to fill up the material when reordered parts arrive at storage area.

15. Computer Program Development 9 functions of program (continued): 7. Overwrite Part Data This function is an engineering than user’s function. It must be used with care. 8. Remove Part Once an item will not be used anymore, this function will be invoked to remove the part from the system.

16. Computer Program Development 9 functions of program (continued): 9. Exit This is used to exit from the program without perform any action

17. Implementation After complete the program coding and preliminary test, the system is entered with inventory data. The program uses text menu to interface with users. Main menu of program has 9 choices to select. They are:

18. Implementation 1.List up part To list up all the parts in system. Output types can be chosen Parts list up

19. 2. Add new part into system A new part can be added into the system using this function Implementation Add new part into system

20. 3.Calculate Option 3 performs calculation, then informs user items and quantity that are needed to reorder. Implementation Calculate for reordering and quantity

21. 4.Withdrawal part When item is pulled out from store, this function cuts the remaining quantity from system Implementation Withdrawal part

22. Implementation 4.Withdrawal part (continued) After withdrawal Quantity of part number 2 reduces to 280

23. 5. Update for part ordered Option 5 is for update to the system that an item has been reordered. Implementation Update part ordered

24. 6. Fill up inventory Adjust quantity of part in the system once the order is delivered. Implementation Fill up inventory For part number 2 of 148 units

25. 6. Fill up inventory (continued) Implementation Quantity of part 2 after fill up The part’s quantity increase to 428 units

26. 7. Overwrite part’s data This option is an engineering function than user function. It should be used with care. Implementation Overwrite part data

27. 8. Remove part Option 8 removes part from the system in case that the part is not used anymore. Implementation Part Removal

28. 9.Exit This function is provided for the case that user wants to quit from the program without doing any function. Implementation

29. Conclusions Inventory control can be done very well with help from computer programming. The program from this project can accept and build data files for each inventory item. The data file records name of the part, quantity, current demand, ordering lead-time, ordering cost, carrying cost, time having that quantity, and status of the item. The program recalculates for demand and can well inform user to order part with most economical ordering quantity.